correcting entry On August 1, Garcia Company received $600 on account (from a cu

Question

correcting entry

On August 1, Garcia Company received $600 on account (from a customer for services previously performed and billed on July 15). The bookkeeper recorded this by debiting Cash and crediting Service Revenue

Garcia Company has employed a bookkeeper who is inexperienced. On December 30, after reviewing the records for the year, you discover the following error.

On August 1, Garcia Company received $600 on account (from a customer for services previously performed and billed on July 15). The bookkeeper recorded this by debiting Cash and crediting Service Revenue

Explanation / Answer

so first we need to correct the wrong entry that would be

service revenus A/c Dr.

to Cash A/c

as we reverse the entery the previously worong entry will have no effects on the balances now we need to record the real entry and that entry would be

Bank A/c Dr.

To (customer's A/c)

so by doing this the entry will be recoreded in the books os accounts.

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